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Hot on the heels of Rio Tinto's recent 'two tongued tango with Chinalco' comes the 'populist prance' by Australia's embattled New South Wales state Labor Government.

Facing pressure at the electorate they've managed to ruffle feathers via Sydney's local Daily Telegraph with a dubious leak a day before the release of their NSW state budget.

Essentially the scoop claimed that the NSW budget would restrict almost AU$4 billion worth of government goods and services specifically from Chinese firms, with a ban on "made in China" products.

Other outlets were naturally quick to run with the story and a follow up Fox TV news item even suggested the 'threat of a possible trade war'.

The popular news portal, news.com.au, of which the Telegraph is a member, even ran an article by extension, "New South Wales Government imposes ban on Chinese products".

Please give me a break – koala vs. the panda? They're both vegetarians eating at the same trade table.

Nevertheless such meaty unsubstantiated sensationalism jeopardizes the greater good remembering that one in five jobs in Australia is trade related.

Fortunately a large sector of the Australian public replied unfavorably towards this stunt, appreciating the complexities and benefits of global trade.

According to a spokesman for Australia's Department of Foreign Affairs and Trade, the Federal Trade Minister, Simon Crean wrote to NSW's Premier Rees Monday night suggesting that protectionist measures run a very real risk of leading to a downward spiral of protectionism with other countries introducing measures of their own. Rather than achieving the stated objective of saving jobs, such an outcome would ultimately cost jobs in NSW and elsewhere in Australia.

Graphic that ran with the story, "NSW to buy Aussie-made products to save jobs", from June 15, Sydney's Daily Telegraph.

And from the NSW Treasurer's budget speech yesterday, no direct indication that his Local Jobs First package was directly singling out China for embargo rather just a preference to support local business in these tough economic times.

Yesterday the Australian, the national newspaper that outranks Sydney's Telegraph and is part of the greater News corp. family, downplayed Monday's tomfoolery as a stunt - under the headline, Choosing local businesses 'may hurt NSW budget'.

As for the local Australian Chinese community, as for Chinese commerce operating in Australia and as for the more distant observer – Monday's gaff has the potential to do more harm than good considering we are close to the edge.

The NSW Government is not alone trying to protect local jobs. Here on June 4, the National Development and Reform Commission (NDRC), China's top economic planner, and eight other ministries jointly released a notice requiring their local governments to give priority to Chinese products when purchasing for government-invested projects.

This was in response to complaints from local firms that foreign companies were strategically placed and receiving favorable treatment during the tender process for contracts arising from the 4 trillion Yuan stimulus package. In particular they referred to the awarding of a contract to German industrial conglomerate Siemens AG for a 750-million-euro order for Beijing-Shanghai high-speed rail trains.

Interesting how in recent times the NSW government was also being hammered by locals for awarding a contract to a Chinese firm for the construction of train carriages in their home state while also outsourcing the production of other manufactured goods.

Obviously, in a bearish global economy, people and decision makers are hurting all over - but now more than ever is the time for renewed commitments to the preservation of open trade.